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CHRIS CUOMO, CNN ANCHOR: Breaking overnight. Ukraine strikes back. The government moving town by town, taking on pro-Russian demonstrators as Vladimir Putin warns a civil war is coming. What will the U.S. do next?

Your NEW DAY starts right now.

Good morning. Welcome to NEW DAY. Right now, a massive rescue operation is under way after a ferry carrying 459 people sank off South Korea's coast. Actually in the process of sinking as you can see. Take a look at this incredible image. The ship is almost entirely submerged and sinking very quickly.

KATE BOLDUAN, CNN ANCHOR: It is huge. Officials say at least three people are dead and nearly 300 unaccounted for at this hour. Most of the passengers were high school students. A lot of that vessel, as Chris says, under water with many people fearing -- with many fear that people could still be trapped. Let's get to Pauline Chiou who is live in Hong Kong with the latest breaking details. Hi there, Pauline.

PAULINE CHIOU, CNN INTERNATIONAL CORRESPONDENT: Well, Kate, those high school students you mentioned were on their way to a resort island for a four-day holiday. At 9:00 a.m. this morning, the ferry sent out a distress signal and then two hours later that ferry was just about gone.

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CHIOU (voice-over): A desperate rescue after a crowded passenger ferry suddenly began sinking off the coast of South Korea. More than 450 people were aboard the ferry, 325 of them high school students from just outside Seoul on a class trip to a nearby resort island. One student told the Korean news network, YTN, that he heard a loud bump before the ship started to sink.

Shortly after the ship issued a distress call helicopters and boats including a ship from the U.S. Navy Seventh Fleet scrambled to assist the overturned vessel rushing to rescue the frightened passengers, clinging to railings, waiting for help.

These two passengers were lifted to safety in a helicopter basket while dozens of others were pulled out of the frigid water by rescue boats. One passenger told YTN that they were told to jump into the sea as the ship began to sink. Within hours the ship was almost completely submerged. Only a small portion of the hull was visible above the water. The weather was clear at the time and authorities are still not clear on what caused the catastrophe.

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CHIOU: And that is the big mystery because this is a pretty busy sea route. Any rock or obstacles should have been very well charted. Many of the students actually lost their cell phones in the ocean, so they had to borrow cell phones from rescuers to call their parents.

Now, the parents of the students still unaccounted for have gone down to that port city near the accident. And still, Chris, as you can imagine, just being torn apart waiting for word on what has happened to their child.

CUOMO: All right, Pauline, thank you very much. The bump could have been a lot of things that happened on board. We mentioned the U.S. Navy is joining the search and rescue operations. With us on the phone is Lt. Arlo Abrahamson. He is the public affairs officer for the U.S. Naval Forces in South Korea. It's great to have you with us.

What do we understand? We're hearing that these reports of a bump and then they were told immediately to jump into the water. That's unusual. What's the best guess right now as to what the situations were on board?

LT. ARLO ABRAHAMSON, U.S. NAVY PUBLIC AFFAIRS OFFICER (via telephone): Good morning, Chris. Thanks for having me. First I want to say that our thoughts and our prayers go out to the passengers of the Korean ship, "Sewol" that sunk today. This is a terrible tragedy to see and our hearts go out to the families of this unfortunate incident.

CUOMO: Point well taken, Lieutenant. As we discuss what's actually still ongoing out there what's the best sense so far of what the situation was?

ABRAHAMSON: Well, we're still trying to find out that ourselves. We have the USS Bonhomme Richard, which is an amphibious assault ship. And the ship is operating in the vicinity of the waters near where the ferry sunk. And we are on standby awaiting request from the Republic of Korea government to support and the ship is -- the crew is ready to support as requested and as need by the republic government.

CUOMO: So far they haven't asked you guys to do anything?

ABRAHAMSON: No, sir. We have not -- we have not -- at this time we are still awaiting the request from the government to assist, but we are standing by and we are ready to support as required.

CUOMO: As you well know, there are often a lot of air pockets in a vessel like this that's that still has a little bit of its nose up there on the bow side. Do you have the capabilities to get under there, the 50 or 60 feet or so that you will need to get inside that vessel if there's an opportunity? ABRAHAMSON: Our USS Bonhomme Richard is equipped with the MV-22 osprey as well as search and rescue helicopters, MH-60 helicopter and we do have that ship does have the ability to provide small boats and divers on the scene if that was requested by the government.

CUOMO: Best information so far, do you believe that the 300 unaccounted for, is that still the number or do you think one of the reasons that South Korea is not asking for your help because they have accounted for everybody?

ABRAHAMSON: Well, I don't think they have accounted for everybody yet. I think -- I want to say that the Republic of Korea has done a great job in their rescue efforts thus far and they arrived on the scene quickly. And have been working tirelessly to locate the missing passengers so they're doing a superb job. And our forces that we've been in touch with the on-scene commander and our forces are ready to support if requested. And we are in the vicinity of the area and prepared to support.

CUOMO: What's the latest word on how much of the vessel is still above water, if any?

ABRAHAMSON: That, can't tell you. I'm here in Seoul. The Republic of Korea government, the Ministry of National Defense, could probably provide you a better answer on that with regards to the vessel and how much has been sunk.

CUOMO: So best hope against hope right now is that they are using divers to get under there because people could be in air pockets, right? That would be the best hope.

ABRAHAMSON: Yes, that's our understanding and we are -- like I said, we're standing by and we've been in touch with the on-scene commander on the scene. And we're prepared to assist as necessary.

CUOMO: And it's also important, it had to be a very fast response because the sea there, the yellow sea, very cold and people are describing the conditions as they jumped in unusual to be told to immediately abandon ship that way. So to get there quickly enough to rescue them is no small effort. Thank you for the update, Lieutenant. Let us know if you guys are brought officially into the search and we'll stay on top of this story. Thank you for joining us, Lieutenant.

ABRAHAMSON: Thank you, Chris. Glad to be here this morning.

BOLDUAN: All right, now to the search for missing Flight 370 this morning. The Bluefin-21 submersible is back in the Indian Ocean this morning looking for any sign of the plane's wreckage. Earlier, it was forced to return to the surface to fix a technical issue.

Erin McLaughlin has the latest on the search live from Perth, Australia, for us. Erin, have they given any further information on what that technical glitch was?

ERIN MCLAUGHLIN, CNN CORRESPONDENT: Not at the moment, Kate. We're still trying to get more information on that glitch that forced the Bluefin-21 up to the surface. We understand that they brought it back on board the "Ocean Shield." They downloaded its data and saw no objects of interest. I think one of the important things here is that they were able to get it back into the water and back searching.

No word on when we can expect it to resurface again. Now, we're still waiting the test results of an oil slick that was found in the vicinity of the "Ocean Shield" near where it detected the pings. They went to great lengths to bring a two-liter sample, traveled by military ship, traveled by helicopter, traveled by jet.

It was expected to arrive here in Perth this morning. We understand that Malaysian Airways has supplied samples of its Boeing 777 jetliner fluids to be able to be compared. So we're still waiting for those results. Some speculating that this liquid could potentially be from the missing plane's engine, but that's pure speculation at this point. Authorities are saying they're treating this as any other lead, that neither needs to be ruled in or ruled out -- Kate.

BOLDUAN: All right, Erin, thanks so much. The latest on the search from Perth, Australia. Thank you.

Let's bring in Mary Schiavo, CNN aviation analyst and former inspector general for the United States Department of Transportation and also David Soucie, CNN safety analyst and former FAA inspector to talk about these latest developments. Good morning again to both of you. It probably seems like one long day for you guys since you're on air so much.

David, first let's talk about what could possibly have been this technical glitch this time to bring it back up to the surface. First time it had to return to the surface quickly, it was because it reached its max depth. This sounds a little different.

DAVID SOUCIE, CNN SAFETY ANALYST: It probably is. I'm not specifically related to what is going on. But what I suspect is that because they brought it back up and they adjusted parameters to allow it to go push the limits, to be a little bit lower, is probably going a little lower, which can cause some technical difficulties with it. They probably expected that.

BOLDUAN: Mary, what does this also re-enforce for us that the challenges that the Bluefin is facing down there?

MARY SCHIAVO, CNN AVIATION ANALYST: Well, I think it re-enforces that this could be a long time. I mean, in so many investigations, you know, sometimes you're able to find these black boxes just right away like the other one in the Indian Ocean, the South African airways was two days. But the other was several months. Who knows which end of the spectrum this will end up on? The Australians believe they are in the right place. This will take a long time and lots of patience with the crews.

BOLDUAN: Lots of patience for everyone involved, especially the families waiting for an answer in some way, shape, or form here. At the same time as this could be a long process, David, we're also hearing from Angus Houston that the air and surface search could be wrapping up in two to three days. What does that tell us, the fact that -- what does that tell us about where this search is moving because it seems like now it's all underwater.

SOUCIE: Yes. Well, in my mind that means two different things. One, it's just so disburse that they are having a hard time finding anything. And that's possible at this time because of all the weather that's gone through and everything else. They just don't see a return on investment there as far as time goes. So that's one possibility.

The other is that they're so certain that aircraft is where they think it is because of those pings that they're just going to focus the search on that. There are some clues found by the floating debris, but I think they're kind of thinking that it went down in bigger pieces than originally they thought.

BOLDUAN: While this search has been going on for a long time now, Mary, do you think it's smart to be giving up the air and surface search at this point?

SCHIAVO: Well, I do. I have to go with what a Australians think they have under water because at some point they have to give up the search, the assets, the people, the human effort that's going into it. They really need to put their efforts elsewhere. If they believe, as they certainly have every indication that they are on the right spot, but if they believe they will soon be finding the plane they have a lot to do.

They're going to have to get different crews in place. They have to shift their whole modus operandi. They have to have the recovery and many human lives were lost. They have to switch gears to do that as well and those are huge jobs and they probably need the manpower for that. You have to retool and probably reship.

BOLDUAN: I'm just beginning to learn, David, what that process is going to entail. We've been so focused on finding the black box, detecting the pings. The point after that is an arduous process of bringing the debris back up to surface and it quite dangerous, dangerous part of that operation when you get it on surface and move it on to dry land, right?

SOUCIE: Yes, it really is. On a land investigation, you are able to cordon off. When you're doing a recovery effort t from the sea it's very easy to damage critical evidence that could tell us why this happened, what happened. So they have to be extremely careful, plus they're going three miles down. It's like looking down from an airplane that you're in and saying that's where we're getting this thing out of the ground. That's how far we are.

BOLDUAN: I want to also get both of your takes on the following, that the Malaysian cabinet announced they agreed to set up and in their words an international investigation team. And the investigation team will include three groups, airworthiness group, and medical and human factor group. What does this tell you, Mary?

SCHIAVO: Well, this is very similar to what's set up in the United States by the NTSB. In fact, we set up far more committees than that. And the way we deal with an investigation of an air crash is anybody who can potentially have played a role in it, you know, Boeing, the airline, air traffic control, they are parties to the investigation and they set up working groups.

And here since Malaysia has already said that they don't have the technical expertise, for example, to deal with the black box, it's going to have to be an international team. So this is a very good development. You know, frankly, these teams are usually set up sooner than this, these committees. The fact they said it's going to be an international investigation and include many other countries bodes well for me because, one, they're going to call on the experts they need.

And, two, it will help us with transparency. Criticism to them about how secretive they've been and information has come out in dribs and drabs. With an international task force addressing it and many committees they will be much more transparent and that will help them in the long run. May be painful now, but in the long run people will be able to have faith in their investigation.

BOLDUAN: Absolutely, a quick final thought on that, David?

SOUCIE: I see more than that, Mary. I understand that's what they're looking at as the approximate cause of what's going on with this accident. But I see more than that. I see that they're reaching, what did we do systematically wrong? What kind of latent precursors can we prevent in the future? What's wrong with us? Some way we can improve? That says a lot for the Malaysian government understanding the problems they had and understanding how -- what it's going to take to fix those problems.

BOLDUAN: Important thing to be happening in tandem with trying to figure out what happened with this plane at this time. David Soucie, Mary Schiavo, thanks, guys -- Chris.

CUOMO: All right, Kate, we're monitoring the situation in South Korea right now. We're going to have much more on the ferry disaster there. It's sinking. It's far deeper under water than what you see right there right now. Rescuers are t battling currents that's keeping them from getting inside the submerged vessel. They believe people could still be alive inside. We're going to take you from that story to Ukraine because we're being told it's on the brink of civil war. A standoff in eastern Ukraine between pro-Russian militants and Ukrainian forces. How long before tensions do boil over? We'll break it down with a former U.S. assistant secretary of state.

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CUOMO: Welcome back to NEW DAY.

We're following breaking news. A look at the pictures. The pictures are telling the story right now. Massive rescue operation is under way in South Korea after a ferry carrying 459 people sank off the coast there overnight. Most of the passengers were high school students. Officials say nearly 300 are still missing. Let's bring in David Gallo. You know him. He's co-leader for the search for Air France 447, director of special projects of Woods Hole Oceanographic Institution.

Not your area of specific expertise but the dynamics are familiar. Here's what we know -- they did get 164 people out of the water so far. That's good. There have been three confirmed deaths. Those numbers are very early. We're going to avoid them because this is says that's still ongoing.

Here's what we understand about how we got there. People on board say they heard a bump. It sounds like they must have hit something. The water here is very well charted and very deep. So, that's unusual. They believe it could have been an explosion on board that gave that sensation. They were almost immediately told not to get into the rescue boats but to get into the water. The Yellow Sea very cold, quick-moving currents.

DAVID GALLO, WOODS HOLE OCEANOGRAPHIC INSTITUTION: Right.

CUOMO: There was a quick response from the South Koreans. They brought amphibious vehicles out there. The water we're told is 40 degrees Fahrenheit. So, very limited amount of survivability. U.S. Navy in the area, they brought an amphibious ship there. They've been told the stand down currently.

From this point, the ship then submerged. So, let's start with the initial dynamics. Something like this happens. It's balance ability is lost. It capsizes.

GALLO: Horrific, because inside the ship, some people may be the first time on a ship, even though it's a commuter vessel. So, trying to navigate inside the ship to get out is not easy.

CUOMO: That's right. Because everything, all of your orientation changes.

CUOMO: The first good piece of information is they do seem to mostly have life jackets on. How big a difference will that make?

GALLO: Well, sure. I mean, that will help you in the water but in really cold water, it will keep you afloat, but not necessarily keep you alive. That's why this is really -- I hate seeing something like this. It's horrible.

CUOMO: Now, we believe in lapsed time we're trying to figure out how long it took to go from this position, and we'll show you pictures of where we believe it is right now, which is really just the underside of the bow is the only thing visible anymore. How long can you stay in water like that? You think 40 degrees, quick-moving current also.

CUOMO: Now, the task in a situation like this as we learned with the coast of Concordia that the Italian cruise ship there is to be able to get underneath. There are tons of air pockets in a vessel like this. However, here are the obstacles to entry for that -- the South Koreans are saying the currents are keeping their divers from going underneath. Current is very dangerous for a diver, especially under water as you go deeper.

GALLO: Right.

CUOMO: They don't want to get swept into the boat, I guess, David, right?

GALLO: Sure, that's right. It makes things worse. It looks like the ship is completely capsized here but they've got this open up into the very base of the hull.

CUOMO: Well that is a bow thruster port for a side moving engine. It's not something they called in. The good news is they still have that, means there's still air in the boat, something there for them to work at least to mark it. Cranes are on the way. They believe they will be able to salvage this vessel but not in time to help with the actual rescue.

The downside of it being in this position is that you now have to go much deeper to get inside.

GALLO: Yes, exactly right. You've got to get in the water, down deep and then back up again. And just for the passengers that -- on the inside, that's got to be horrible. Positively horrible.

CUOMO: And now, you have to start making assumptions. Obviously, it's easy to perish in a situation like this. It's hard to survive but people often find that will in these more urgent circumstances, because of the configuration of these ships, is it safe to say, as long as there's enough air to keep buoyancy, there could be air in those pockets inside as well, where people could actually be having air pockets or survivability?

GALLO: Positively. But one question is how stable is the ship in this position? I mean, is it going to be stable floating like this or if the water depth is great enough, is the ship going to --

CUOMO: Well, they believe it's deep enough to take the entire vessel. It will go underneath, completely submerge.

But how much of a risk calculation is it in sending divers in something like this? What is the calculation to save a life versus risking your own?

GALLO: Yes, that's a good question, but I mean -- that's where the heroes show up, right, when times are like this that you're going to take those risks to try to get people -- people out but certainly not an easy task because some of the divers, too, don't know their way around this vessel.

CUOMO: And they were saying that even though initially when it was just at 45 degrees roll, it does make it almost like scaling a mountain to go down and come back up. It's not as easy as jumping on the boat and rescuing people.

GALLO: Right, because the pathways, the hallways, doorways, everything is now different and -- they've lost power. It's dark on the inside of the ship, so it's just one situation that's not -- not, you know, incredibly unpleasant to be in a place like this. Horrible. Horrible.

CUOMO: Three hundred unaccounted for at last report there. And again, people on board said they felt a bump, a big movement in the vessel and it had to be pretty massive to move something like this. We're calling it a ferry but really it's a ship, look at it. It's hundreds of feet long, and they were told almost immediately to put on their life vests and get the water, very unusual.

Vessels like this have rescue craft and different types of rafts and stuff like this type of situation I would imagine, right?

GALLO: Sure. The only thing I can think of if they knew the ship was going to do a roll and sink it's better to get out and take your chances on the surface than stay in the vessel itself.

CUOMO: A lot of heavy equipment on deck as well. If you look at the pictures, you'll see things fell off and surrounding the water that creates another obstacle to staying alive and not getting hit by something.

We're going to keep taking you through the information as we get it, 300 souls as we often say in air and sea situations, lives are at risk here. We'll give you the latest as we get it.

South Korea seas, this is the Yellow Sea. They're trying to find 300 people after this ferry capsized. We'll give you the latest when we have it.

David Gallo, thank you very much.

Kate?

BOLDUAN: Coming up next on NEW DAY, we're going to continue to follow this situation as we monitor the search for the missing in South Korea. But up next, the situation in Ukraine is being described by Vladimir Putin as a country on the brink of civil war. That's in his words. Pro-Russian supporters riding on tanks through city streets as the Ukrainian government in the midst of what they call anti-terrorism operation.

What's the next move? And what can be done to calm the tension?

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BOLDUAN: Welcome back to NEW DAY. Breaking news out of Ukraine. Tensions with Russian sympathizers reach a dangerous point. We've just learned two Ukrainian soldiers, an officer and a soldier have been kidnapped. Armed protesters have also taken over a mayor's office in eastern Ukraine. And witnesses say pro-Russian forces surrounded an army column this morning.

This as Ukraine is launching that what it calls an anti-terrorist operation.

International correspondent Phil Black is in northeastern Ukraine with much more on all the developments.

What are you seeing at this moment, Phil?

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Kate, where we are is on one of the roads to the town of Sloviansk. Sloviansk appears to be the focal point of what the Ukrainian government is calling its anti- terror operation. It is a town where pro-Russian militants and protesters have really consolidated their control in recent days -- more so than other towns around here.